Environmental Management System (EMS) in an Organisation

1. How would you summarise the environmental challenge faced by industry at the current time?

Since the start of the industrial age, economic growth and the environment have often been in conflict (Florida and Davidson, 2001). Motivated by more than just “altruistic concerns” (Florida and Davidson: 64) many companies are now taking initiative and incorporating the environment into their business strategy. The environmental challenge to industry comes from a huge number of sources, but it can generally be narrowed down to three directions, commonly known as the ‘green triangle’ (Gale, 1996). Firstly, environmental laws and regulations are forcing industry to improve their environmental performance. Secondly, there is a need to improve company image (Morrow and Rondinelli, 2002), and pressure comes from customers or voters who are interested in less environmentally harmful goods or services (Gale, 1996). Thirdly, an environmental challenge comes from the “financial, banking and insurance communities who are concerned about the cost of environmental accidents or mismanagement” (Gale, 1996). In fact, good environmental management leads to reduced risk which is highly valued by the financial markets (Feldman et al, 1996).

2. Describe the relevance of the First Law of Thermodynamics and the Law of Conservation of Mass to the economic system.

The First Law of Thermodynamics is “the fundamental principle of physics that the total energy of an isolated system is constant despite internal changes”, and the Law of Conservation of Mass is the principle that “matter cannot be created or destroyed”. These laws apply to the economic system as “an irreducible whole that develops, maintains, and reproduces, or renews itself be mobilizing material and energy captured from the environment” (Ho, 2005). This is particularly significant to the relationship between the environment and economic systems, as the latter essentially depends on the flow of resources from the natural environment. Therefore, any entropic costs can either be endured by the economic system or the environment. Consequently, “when the cost of valuable (non-renewable) ecological resources consumed or destroyed are not properly taken into account, the entropic burden falls on the ecological environment rather than on the economic system (Ho, 2005).

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3. What does the term ‘sustainable development’ mean for industry?

The Bruntland Commission’s widely used definition of ‘sustainable development’ is “development that meets the needs of the present without compromising the ability of future generations to meet their needs” (WCED, 1987: 43). It is often argued that this definition is intentionally vague with the intent of creating a consensus. And create a consensus it has – “no one in their right mind is against sustainable development” (The Economist, 2002) – and many international organizations, national and local governments, and businesses have incorporated the concept into their plans. For industry, the term has extended to “include the simultaneous consideration of economic growth, environmental protection, and social equity in business planning and decision making” (Rondinelli and Berry, 2000: 1). Many businesses, then, have taken on the concept of sustainable development, and have put into practice business plans that allow them to meet their needs in the present whilst taking the environment into consideration, thereby ensuring that their industry can continue into the future. Any industry that is really striving for sustainable practices “must be phasing out its use of substances that are systematically at odds with a sustainable world, while measuring what share of the world’s limited regenerative capacity is occupied by its use of renewable resources” (White, 1999, in OECD, 2001: 11).

4. What are the potential benefits for a company successfully responding to the environmental challenge?

The potential benefits (economic and environmental) for a company successfully responding to the environmental challenge are too numerous to include them all, so only a limited selection will be discussed here. Though the resulting environmental benefits may not create direct economic benefits for the company, the policies attract (and keep) customers by “establishing a strong image of corporate responsibility” (Morrow and Rondinelli, 2002:163). In economic terms, though environmental sensitivity is often viewed as being at odds with cost-effectiveness, a study of organizations that implement Environmental Management Systems (EMS) found that “the majority believe the benefits outweigh the drawbacks” (Darnall et al, 2001). Some examples of how reacting to the environmental challenge can save companies money are by “improving efficiency and reducing the costs of energy, materials, fines and penalties” (Morrow and Rondinelli, 2002: 162). As mentioned previously, a company that can reduce their environmental incidents and liabilities not only gains from losing those fines, but also profits from decreasing risk, and becoming more attractive in the financial market.

5. Describe the relative advantages of anticipatory controls over continuing controls. Use examples to illustrate your answer.

Environmental controls can be described as mechanisms that are used to limit environmental harm. A fundamental aspect of designing an EMS system is developing the controls that will be used. Environmental aspects (see below) must be identified to determine the “specific facility operations and activities associated with significant environmental aspects” (The Lexington Group, 2005: 40). From this, appropriate control procedures can be created for each activity to limit environmental impacts.

Anticipatory controls are more advantageous than continuing controls because they allow an organization to attempt to avoid environmental harm in the first place, and take into account potential, impending environmental harm. If controls are changed in anticipation of a possible environmental impact, this control can attempt to curb damage before it happens. The alternative is continuing control that only changes after an event causes environmental damage and proves that the controls need to be changed. Given the “irreversibility” of much environmental damage, the advantage of anticipatory controls seems clear.

6. How would you describe the relationship between environmental aspects and impacts? Use examples to illustrate your answer.

The ISO 14001 definition of environmental aspects are “feature[s] or characteristic[s] of an activity, product or service that affect, or can affect, the environment” (Praxiom Research Group, 2005), and environmental impacts are changes to the environment that can be positive or negative (Praxiom Research Group, 2005). Environmental impacts are produced by environmental aspects. For example, many industries often handle oil or other hazardous materials. When these activities are taking place, a possible environmental aspect is the “potential for accidental spillage” (The Lexington Group, 2005: 35). The effect of this environmental aspect, or the environmental impact, is the “contamination of soil or water” (The Lexington Group, 2005: 35). When determining the significance of an environmental aspect, it is important to take into consideration the probability, scale, severity, duration, and cost of reduction, of the environmental impact (The Lexington Group, 2005).

7. What is the role of the Environmental Policy and how is it defined by the International Organisation for Standardization (ISO)?

An Environmental Management System (EMS) is a “systematic approach for managing an organization’s environmental issues and opportunities” (The Lexington Group, 2005: 15). The “heart and soul” (same as last) of the EMS is the “environmental policy”, defined by the ISO as a “statement [that] expresses a commitment to the implementation and maintenance of an organization’s environmental management system and the improvement of its overall environmental performance” (Praxiom Research Group, 2005: 1). The role of environmental policy is to prevent any environmental damage, as well as to ensure any industry is observing any legal or other requirements. An environmental policy should also craft environmental goals, and function as a basic framework for action.

8. What training needs should be considered when implementing an environmental management system (EMS)?

“Effective training programs, including those that raise the environmental awareness levels of all people in the organization, are a critically important element in implementing and maintaining the EMS” (The Lexington Group, 2005: 14). A training program must deal with the importance of the environmental policy with all of the employees, as they “must understand and recognize the commitments” for the EMS to be successful (Anthony, 2001: 4). Additionally, for an EMS to be successful, all employees must appreciate and comprehend their particular roles and responsibilities, as well as the possible “consequences of not following operating procedures” (The Lexington Group, 2005: 25). Employees of a given organization should be able to associate and understand how their particular function fits into the wider environmental policy (Anthony, 2001). Depending on who uses or has access to the facility, it may also be advisable to train people other than internal staff, or at least raise their awareness of the EMS (Anthony, 2001).

9. What role does audit play within an EMS and what are the key features of a successful audit?

An audit within the EMS system is “a systematic, documented, objective review of the manner in which environmental aspects of a program, project, facility or corporation are being managed” (APPEGA, 2004: 7). The audit is necessary both to determine the design of the EMS at the start, as well as evaluate the progress of the EMS on a continual basis. An environmental audit at the start ensures that an industry has a “good understanding of its environmental effects before it [designs a] competent strateg[y] to reduce its impact” (OECD, 2001: 41). The EMS audit is a crucial necessity for any facility’s EMS to ensure that the facility is meeting the requirements of the EMS, and that it is being properly executed and sustained (The Lexington Group, 2005). For an audit to be successful, it is vital that it be “independent, objective and impartial” (Praxiom Research Group, 2005). A sound audit must also concentrate on priorities, such as particular operations that are associated with high risk, or activities that were singled out in a previous audit.

10. How might you gain senior management approval for the implementation of an EMS and why is such approval important?

The Lexington Group, a management consulting firm, states that “gaining the full and complete support of senior management is the single most important challenge in establishing a formal EHS management system in an organization or facility”. Without the full support of the senior management, an EMS is unlikely to succeed. For example, senior management may approve an EMS but not really be committed, with environmental talk being “rhetoric rather than reality” (The Lexington Group, 2005:47). An EMS may not be a high priority because the senior management does not recognize the potential benefits. Making the case about the benefits of an EMS may be vital to gaining genuine senior management support. Presenting an account of improved community relations, higher employee productivity, reduced safety incidents, and reduced insurance premiums, all within the framework of cost-reduction, may be the means of gaining the necessary senior management approval (The Lexington Group, 2005).

Works Cited:

Anthony, A (2001) ISO 14001 Environmental Policy (4.2), available from: http://www.deq.virginia.gov/ems/pdf/mod5.pdf

APPEGA (2004) Guideline for Environmental Practice, available from: http://www.apegga.org/pdf/Guidelines/18.pdf

Darnall et al (2001) ‘Environmental management systems: Opportunities for improved environmental and business strategy?’, Environmental Quality Management, 9(3) pp 1-9.

The Economist (2002) The Johannesburg Summit: Sustaining the poor’s development, 29 August 2002.

Feldman, S, Soyka, P. and Ameer, P (1996) Does Improving a Firm’s Environmental Management System and Environmental Performance Result in a Higher Stock Price?, ICF Kaiser International.

Florida, R and Davidson, D (2001) ‘Gaining from Green Management: Environmental management systems inside and outside the factory’, California Management Review, 43 (3) pp 64-65

Gale, R (1996) ISO 14001 to Tackle Green Triangle, available from: www.web.net/ecoeco/iso14000.htm

Ho, Mae-Wan (2005) Are Economic Systems Like Organisms?, available from: www.i-sis.org.uk/hannove.php

The Lexington Group (2005), Best Practice Guide: Application of ISO 14000 Environmental Management Systems (EMSs) for Municipalities, available from: http://www.iie.org/programs/energy/pdfs/Applic%20ISO%2014000%20for%20Municipalities.pdf

Morrow, D and Rondinelli, D (2002) ‘Adopting Corporate Environmental Management Systems: Motivations and Results of ISO 14001 and EMAS Certification’, European Management Journal, 20(2), pp 159-171

OECD (Organisation for Economic Co-operation and Development) (2001) “Encouraging Environmental Management in Industry”, Science, Technology, Industry – Business and Industry Policy Forum Series, available from: http://www.oecd.org/dataoecd/10/32/2090553.pdf

Praxiom Research Group (2005), ISO 14001 2004 Plain English Definitions, available from www.praxiom.com

Rondinelli, D and Berry, M (2000), Environmental citizenship in multinational corporations: social responsibility and sustainable development, Chapel Hill: University of North Carolina.

WCED (1987) Our Common Future, the Brundtland Report, Oxford: Oxford University Press.